IRS Tax Code Section 1031

I read an article over the weekend that described an opportunity for investors using the provisions of section 1031 of the tax code to complete a "tax-free exchange."

This is incorrect. While section 1031 does exist it is a situation where one property (relinquished) may be exchanged for a like-kind property (replacement) but the taxes due are "tax-deferred" until the replacement property is sold out right.

If you believe a 1031 transaction is for you, please check with your accountant or tax advisor before you proceed. If done incorrectly and audited by the IRS, this type of transaction becomes a taxable event with taxes due in that tax year.